+
India's VGF Program Boosts Battery Energy Storage
POWER & RENEWABLE ENERGY

India's VGF Program Boosts Battery Energy Storage

The Viability Gap Funding (VGF) program for Battery Energy Storage Systems (BESS) recently introduced in India has received widespread industry approval due to its potential to impact system costs, demand, and manufacturing in the country. The VGF program, approved by the Union Cabinet in September 2023 with an initial allocation of Rs.94 billion ($1.1 billion), designates Rs.37.6 billion ($452 million) as budgetary assistance to facilitate 4 GWh of BESS projects by 2030-31. Key figures in the battery industry have expressed optimism about VGF's ability to accelerate India's transition to clean and sustainable energy.

The VGF program is expected to provide a much-needed boost to standalone BESS projects, with 5,020 MWh of projects in the pipeline, according to Mercom India Research's Project Tracker. The assistance, contingent on project completion within an 18 to 24-month window, could cover up to 40% of the project's initial capital cost.

Industry leaders anticipate that VGF will drive substantial demand, optimise costs, and attract private-sector investments. With the Indian government planning to make energy storage mandatory for renewable projects of 5 MW and above, the timing of the VGF introduction is highly favourable. The integration of BESS into the energy ecosystem could improve power quality, balance the grid, and reduce costs, ultimately fostering a resilient and sustainable renewable power system.

VGF is set to act as a catalyst for India's sustainable energy future by attracting private sector investments, promoting high-quality project development, and spurring innovation in the renewable energy sector.

The Viability Gap Funding (VGF) program for Battery Energy Storage Systems (BESS) recently introduced in India has received widespread industry approval due to its potential to impact system costs, demand, and manufacturing in the country. The VGF program, approved by the Union Cabinet in September 2023 with an initial allocation of Rs.94 billion ($1.1 billion), designates Rs.37.6 billion ($452 million) as budgetary assistance to facilitate 4 GWh of BESS projects by 2030-31. Key figures in the battery industry have expressed optimism about VGF's ability to accelerate India's transition to clean and sustainable energy. The VGF program is expected to provide a much-needed boost to standalone BESS projects, with 5,020 MWh of projects in the pipeline, according to Mercom India Research's Project Tracker. The assistance, contingent on project completion within an 18 to 24-month window, could cover up to 40% of the project's initial capital cost. Industry leaders anticipate that VGF will drive substantial demand, optimise costs, and attract private-sector investments. With the Indian government planning to make energy storage mandatory for renewable projects of 5 MW and above, the timing of the VGF introduction is highly favourable. The integration of BESS into the energy ecosystem could improve power quality, balance the grid, and reduce costs, ultimately fostering a resilient and sustainable renewable power system. VGF is set to act as a catalyst for India's sustainable energy future by attracting private sector investments, promoting high-quality project development, and spurring innovation in the renewable energy sector.

Related Stories

Gold Stories

Next Story
Infrastructure Urban

Hexalog Appoints Vishal Shukla as Chief Transformation Officer

Hexalog, a cross-border supply chain and logistics company, has appointed Vishal Shukla as Chief Transformation Officer (CTO) to lead its operational transformation, technology adoption and expansion into new international markets.In his new role, Shukla will oversee the company's transformation strategy across operations, technology, product development and business expansion. His responsibilities include standardising processes, developing scalable operating models, strengthening existing trade corridors and introducing new fulfilment solutions for cross-border businesses.Shukla brings nearl..

Next Story
Real Estate

Dhuleva Group Awards 80-Storey Tower Contract to Eversendai

Dhuleva Group has awarded the core and shell structural construction contract for Dhuleva One50, an upcoming 80-storey ultra-luxury residential tower in South Mumbai, to Malaysia-based engineering and construction company Eversendai.Located near the Babulnath district, the development is planned as a high-rise residential landmark offering panoramic views of the Arabian Sea and Mumbai's skyline. The project will combine contemporary architecture with advanced engineering and premium residential facilities.Eversendai will undertake the structural construction works, drawing on its experience in..

Next Story
Building Material

Nuvoco Marks 10 Years, Targets 35 MMTPA Capacity by FY28

Nuvoco Vistas Corporation Limited is celebrating a decade of operations under the theme ‘Dus Saal Bemisaal’, highlighting its expansion in India's building materials sector. The company has grown from a single cement manufacturing facility into a diversified organisation operating across cement, ready-mix concrete (RMC) and modern building materials.The company's journey began in 2014 when its parent, Nirma Group, commissioned a 2 million metric tonnes per annum (MMTPA) greenfield cement plant at Nimbol, Rajasthan. A major milestone followed in October 2016 with the acquisition of Lafarge ..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code